UK high street stalwart Marks & Spencer fought off tough retail market conditions to post its strongest first quarter sales growth for two years, sending its share price up by more than 5 percent in early trading on the London Stock Exchange.
The high end retailer posted group total sales growth of 3.1 percent in the opening three months of the year, its fourth trading quarter of the financial year, despite an extended winter and heavy snowfall across the country.
However this growth was driven solely by strident food sales, which lifted 6.3 percent on the same period a year before. General merchandise sales at M&S, which includes its clothing department, tumbled by 2.2 percent in the quarter - the seventh consecutive fall.
"We are working hard on improving our performance in General Merchandise and, despite difficult trading conditions, we made progress in our operational execution," said Marc Bolland, M&S chief executive, in the quarterly trading statement.
"We delivered an excellent result in Food, with performance well ahead of the market, as customers continued to trust us for provenance and quality. We are increasingly seen as the destination shop for special occasions."
The firm's multi-channel sales - including online and mobile - grew by 22.9 percent in the quarter, reflecting the shift in consumer shopping habits.
"Marks & Spencer is an interesting retailer which has some fundamental issues despite group sales being up," said Tarlok Teji, retail analyst at Manchester Business School.
"It has pockets of excellence, such as food, under garments and Plan A for sustainability, but then has poor parts of the business dragging it down like fashion.
"Although Mr Bolland has asked the shareholders to wait until the Autumn ranges are in, it is not going to solve the fundamental issue that it takes Marks & Spencer way too long to respond to consumer change. As for the Autumn ranges, they are unlikely to have sufficient impact to create some value for shareholders.
"Also, on a turnover of £10bn it has a market cap of £6.1bn, whereas Next has a market cap of £6.7bn on a turnover of £3.5bn. Mr Bolland needs to make some bold moves and quickly as Marks & Spencer is currently ripe for acquisition."
Retailers have been hit hard by tight household finances as consumers wrestle with rising bills and a real terms wage cut. Future economic uncertainty and slashed growth forecasts for the UK are also weighing on consumer sentiment.
"In January we said we expect the pressure on consumers' disposable incomes to continue throughout 2013," said the M&S statement.
"As a result we were cautious about the outlook for the year ahead and this view remains unchanged."